How we’re capitalizing on opportunities in private equity Our continued focus on secondary investments by Scott Fellmeth, CIPM,® Partner and Head of Family Office Services
by Scott Fellmeth, CIPM,® Partner and Head of Family Office Services
30 July 2025
Long-time Westmount clients should now be very familiar with their investments in private credit, which consist of loans to private companies and property owners. We have long advocated private credit as a source of return and stability due to its high, predictable cash flows and low loss rates.
For the last several years, we have developed a growing interest in private equity, which consists of owning shares of private companies. Since our first foray into this asset class, our enthusiasm has only grown as we feel the opportunity set remains robust. Private equity has outperformed its public peers over time by an average of 4-6% annually, attributable to its higher growth rates, lower purchase multiples, and a premium earned for its illiquidity.1,2
Of course, these returns do not come without risk, a significant one being manager selection. Private equity managers tend to exhibit a much wider range of returns than their public peers (the dispersion of their returns from best to worst). Accordingly, the reward for selecting good managers (and the penalty for selecting bad managers) is significantly more pronounced.
With this in mind, our focus has been on selecting funds and managers who specialize in secondary private equity investments. These funds generally purchase existing shares in more mature private companies from individuals or entities that require liquidity (for reasons unrelated to the quality of the holdings), which can compel them to sell positions at a discount to their fair market value.
We have been investing in this strategy through private funds for many years. In March 2024, we were able to introduce it more broadly into client portfolios through the Cascade Private Capital Fund, a publicly registered interval fund in which Westmount was one of the first and largest investors.
Looking forward, Westmount’s investment committee has been conducting due diligence on several other leading managers in this space. We expect to add to our private equity exposure in the near future, with the goal of further enhancing portfolio returns.
Recent posts
Sources
1Cliffwater Research, “Long-Term Private Equity Performance: 2000 to 2024,” January 2025
2Dawson, “Coming to the Defense of Private Markets,” November 2024
Disclosures
This report was prepared by Westmount Partners, LLC (“Westmount”). Westmount is registered as an investment advisor with the U.S. Securities and Exchange Commission, and such registration does not imply any special skill or training. The information contained in this report was prepared using sources that Westmount believes are reliable, but Westmount does not guarantee its accuracy. The information reflects subjective judgments, assumptions and Westmount’s opinion on the date made and may change without notice. Westmount undertakes no obligation to update this information. It is for information purposes only and should not be used or construed as investment, legal or tax advice, nor as an offer to sell or a solicitation of an offer to buy any security. No part of this report may be copied in any form, by any means, or redistributed, published, circulated or commercially exploited in any manner without Westmount’s prior written consent.
Past performance is not indicative of future results. Investment returns will fluctuate, and investors may experience a loss. No guarantee or representation is made that any investment strategy will be successful or achieve any particular results. All investments involve risk, including the possible loss of principal. Different types of investments involve varying degrees of risk, and there is no assurance that any specific investment will be profitable.
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